MMT: Distribution is the drawback NOT Inflation

Reminder on ‘Jonathan Portes — Nonsense economics: the rise of modern monetary theory’

Blog-Reference on Jan 31

Jonathan Portes is wrong with regard to inflation. See
► Gov-Deficits do NOT cause inflation
► MMT and the inflation-red-herring

The government deficit causes a one-off price hike, but NOT inflation. Repeating the deficit period after period leaves the price at an elevated level. This holds for the current output. Deficit spending on investment goods is an entirely different matter. Both cases are constantly confused.

The lethal effect of MMT policy is NOT on inflation but on DISTRIBUTION. See
► Stephanie Kelton on how to become fabulously wealthy

Anti-MMTers are just as incompetent as MMTers. So
► Debunking idiots does not prove that MMT is valid


Egmont Kakarot-Handtke


For details of the big picture, see cross-references Profit/Distribution.

For more about "tax the rich", see AXECquery.

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REPLY to Andrew Anderson on Jan 31

You say: “You seem to assume that deficits shall be financed with sovereign debt?”

No. In the elementary case, Public Deficit = Private Profit, deficit spending creates first business sector deposits (= money) and government sector overdrafts on the balance sheet of the Central Bank. Whether the overdrafts are consolidated by selling bonds is a separate question. See
► MMT: Not a joke but a fraud
REPLY to Bob Roddis on Jan 18

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REPLY to Clint Ballinger on Feb 1

You say: “As far as AXEC, his basic point that spending in more than we tax out is bad IF WE ALLOW IT to accumulate to wealthy hoarders of our public good ("money"), is correct. We need far higher taxes on the rich, not for "paying for things," but to stop the wealthy from corrupting our political system …”

You directly contradict the official MMT doctrine, which says “Don’t tax the rich.” See
► MMT: Academic snake oil for the people

MMTers like to have it both ways. Schizo is the very logic of the political agenda pusher.

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REPLY to Clint Ballinger on Feb 2

You say: “I think you need to show sources ― any sources at all ― that show "MMT" saying/writing "Don’t tax the rich." I doubt you can.”

I have given the source already above. Here it is again for the illiterate/retarded
► MMT: Academic snake oil for the people

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REPLY to Clint Ballinger on Feb 2

MMTers in general and Stephanie Kelton, in particular, have a problem. As useful idiots for the Oligarchy, they have preached for years now 'make deficits―don’t tax'. Taxes are NOT needed for spending, only for inflation control, and there is NO inflation.

But now this happens: Alexandria Ocasio-Cortez and Senator Elizabeth Warren come forward with a marginal tax rate of 70% and a new wealth tax.

From the MMT standpoint, this is madness the super-rich have to blame themselves for. See
► Stephanie Kelton and the self-destructive stupidity of the super-rich
► MMT is NOT bold policy but spineless fraud

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REPLY to Greg on Feb 2

You say: “Pointing out that playing a zero sum game of finding tax revenue from someone before you fund something else is unnecessary is not the same as saying ‘dont tax the rich’.”

No, it is NOT the same, and I never said so. The fact is that MMTers say (i) don’t tax for revenue and (ii) don’t tax the rich: “Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: ‘Do we need the rich’s money?’ ‘No’” #1

As good foot soldiers of the Oligarchy, MMTers see to it that the rich get their profits via deficit-spending/money-creation, their interest on government bonds, which the IRS conveniently takes from WeThePeople, and that the rich’s tax rates are low and the loopholes are big, and that the foundations/charities/think tanks/lobbies are tax-exempt.

The thing is that billionaire folks like Pete Peterson are really so daft that they complain about deficit-spending/money-creation. Capitalism has already been for a long time on the life-support of public deficit-spending.* Zero deficit means zero macroeconomic profit. Any complaints of the Oligarchy about the State saving Capitalism from breakdown are pure madness.

On this point, Stephanie Kelton is right: “The Wealthy Are Victims of Their Own Propaganda.”

From the standpoint of simple self-interest and because of Public Deficit = Private Profit, the one-percenters and their useful academic idiots should consistently argue FOR deficit spending, and the ninety-nine-percenters and their useful academic idiots should consistently argue AGAINST it. #2

Curiously, it’s just the opposite.


#1 MMT: Academic snake oil for the people
#2 Austerity and the political games Progressives play

* Twitter Feb 2

Source: Twitter

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REPLY to Greg on Feb 3

Why don’t you simply follow the links given?

Bill Mitchell’s piece is titled: “The ‘tax the rich’ call bestows unwarranted importance on them.” and “Do we need the rich’s money?” "No".” and FULL NODE says “MMT agrees. Taxing rich people for revenue is a silly claim.” Richard Murphy says: “The time for pussy-footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.”

This is three MMTers speaking out against taxing the rich.

This answers Clint Ballingers’ silly challenge: “Although, I think you need to show sources ― any sources at all ― that show "MMT" saying/writing "Don’t tax the rich."

And what does Stephanie Kelton tell her fabulously wealthy friends? If you want to avoid taxes you must accept deficits and not complain about them like this brainless billionaire Pete Peterson.

She is right. Pete Peterson simply does not understand that MMT is a wellness program for the Oligarchy. #1

#1 MMT: Redistribution as wellness program

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Twitter Feb 11

For detailed arguments, see Dean Baker on CEPR MMT and Taxing the Rich.

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REPLY to Clint Ballinger on Feb 16

Taxing the rich is contrary to the MMT agenda. According to the macroeconomic Profit Law Q=(G−T), MMT’s deficit-spending/money-creation feeds the Oligarchy permanently with profit, and therefore it makes absolutely NO sense to tax it away.

Perhaps the MMT salespeople still believe that MMT is for the benefit of WeThePeople. The fact is that MMT is a wellness program for the Oligarchy. Everyone can check how MMTers consistently argued against taxing the rich before the Green New Deal propaganda hit the headlines. #1

The philosopher Tom Hickey quickly adapted to the new situation and came forward with a new version of Hegel’s cunning of reason: “‘Taxing the rich’ through progressive taxation has another reason. That is, limiting the political power of wealth and reducing inequality.”

The question to MMTers: Why not simply stop deficit-spending/money-creation, the very producer of profit, political power, financial wealth, and inequality?


#1 MMT: Distribution is the drawback NOT Inflation

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billy blog Jun 12

Does this mean that we shouldn’t ‘tax the rich’?

The present authors’ values indicate we are all for taxing the rich. But not to get their money.

Rather, the rich should pay higher taxes in order to deprive them of their purchasing power, which translates into economic and political power.

This is not a minor issue.

Ultimately, fuelling the notion that we need the rich folk’s money to ‘[pay for] our schools and our caring services’, as the likes of Jeremy Corbyn and John McDonnell never tire of repeating, is a dangerous and misguided narrative for progressives to engage in.

Not only because it fuels damaging myths about how the monetary system works, but also because it elevates the rich and high-income earners to an indispensable status that is unwarranted.

As Pavlina Tcherneva, from the Levy Economics Institute, notes in her excellent response to Doug Henwood’s rather loopy attack on MMT – MMT Is Already Helping (February 27, 2019):

I would say that Henwood (like other “tax-the-rich-to-pay-for-progress” lefties) is tethered to the wealthy by an imaginary umbilical cord that holds his progressive agenda hostage to his oppressors. To me, this is the definition of a self-induced paralysis.

Time to cut the cord. MMT has a profound emancipatory power and the Left would do well to awaken to its potential.

Progressives should come to terms with the fact that the incomes and taxes paid by the rich do not enhance the capacity of a currency-issuing government to provide first-class public services and infrastructure.

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Twitter Oct 13

Source: Twitter

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Naked Capitalism

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Twitter Oct 21, 2019

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Twitter Jan 23, 2020

Get it: MMT-Progressives don’t tax the rich

Comment on Bill Mitchell on ‘Tax the rich to counter carbon emissions not to get their money’#1

Blog-Reference

Economics is NOT a science but agenda-pushing for the Oligarchy. Academic economists are NOT scientists but useful idiots. This is obvious for orthodox/mainstream folks like Paul Krugman who is on the payroll of The New York Times.#2 But it holds also for the heterodox/pluralistic folks who present themselves all over the social media as anti-oligarchic fighters for WeThePeople.

In order to verify this for MMT, in particular, it is sufficient to look at the recent speaking tours of Bill Mitchell and Stephanie Kelton.#3 MMTers do NOT what scientists are supposed to do but what propaganda agents are supposed to do.

MMTers push the Oligarchy’s agenda but can, of course, not say so openly. They present themselves as the good guys, as Progressives who hate and fight the evil of neoliberalism wherever it raises its head and they are among the front-runners of every social movement for the betterment and salvation of humanity.#4

It is pretty obvious that among MMT’s political duties is to try to capture and derail genuine grassroots movements.#5

Where MMT’s true colors become clearly visible is the question of taxation. All MMT’s policy guidance boils ultimately down to deficit-spending/money-creation. Proper economic analysis shows that deficit-spending/money-creation is ultimately to the advantage of the Oligarchy and to the disadvantage of WeThePeople.

The public deficit is in the elementary case defined as D≡G−T and it is equal to macroeconomic profit Q. Because of this, MMTers fight fiercely against budget balancers like Corbyn’s British Labour or the Swabian Housewife. A balanced budget, i.e. G=T, means zero macroeconomic profit.

MMTers argue that taxes are not a necessary prerequisite for spending because the government is the currency issuer. That is technically correct but does NOT economically justify deficit-spending/money-creation.#6 However small, there must be taxation because this is what gives the currency value in the MMT world. So T is always greater than zero.

Now, one would expect that, if taxation is necessary, a progressive MMTer would argue to tax the rich. This is NOT the case. MMTers argue consistently AGAINST taxing the rich’s income.#7 You cannot be more explicit than the MMT loudspeaker Bill Mitchell.

• “Tax the rich! That has become a misguided progressive Left mantra.”
• “That is one of many reasons [to tax the rich]. But you should never include among those reasons a need by government for their cash in order to facilitate spending. Any progressive who articulates that argument is just reiterating neoliberal frames.”
• “The answer is that we need to tax the rich more not because we want the government to get their money in order to spend more, but, rather, to stop the rich using it.”
• “To illustrate the confusion these groups elicit, this same group has signed up to another so-called progressive group and they advocate increasing taxes on higher-income groups to pay for the services we deserve. Meanwhile, in another guise, they hold themselves out as promoting MMT.”

Taxing the rich has always been the instinctive central political plank of genuine anti-Oligarchic movements. Needless to emphasize that fake Progressives are against it: “Any progressive who articulates that argument is just reiterating neoliberal frames.” This is the actual Orwellian newspeak of stupid/corrupt academic economists.#8

Egmont Kakarot-Handtke


#1 Billy Blog
#2 Links on Paul Krugman, proto-scientific impresario
#3 European and UK Teaching and Speaking Tour, February 2020 in #1. For more details enter Bill Mitchell/Stephanie Kelton in the search field of the AXEC Blogspot
#4 MMT: If you’ve got a problem, I don’t care what it is, let me help
#5 MMT: Corbynism is dead, British Labour is next
#6 Criminals and the monetary order
#7 MMT: Distribution is the drawback NOT Inflation
#8 Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks

Related 'MMT and grassroots movements' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Bill Mitchell cracks the spending whip over the Swabian Housewife' and 'Is MMT good for WeThePeople or for the Oligarchy?' and 'How Bill Mitchell stalks Jeremy Corbyn' and 'Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Mainstream vs MMT ― another clown show' and 'The problem with economics as a discipline'. For the full-spectrum refutation of MMT see cross-references MMT.

For more on tax the rich see AXECquery.

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Source: Billy Blog

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Bill Mitchell's blog Jan 28

Twitter Sep 11 2020

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Twitter Nov 21, 2020

Twitter Jan 22, 2021

Twitter Feb 24, 2021

Twitter Apr 1, 2021

MMTers do NOT tax the rich, it is just the other way round: they run a deficit because Public Deficit = Private Profit according to the macroeconomic Profit Law.

Twitter Apr 2

Twitter Apr 8 MMTers don't want taxes from the wealthy but deficits for the wealthy

Twitter May 2

ONE-PAGER NO. 67 | June 2021

EDWARD LANE and L. RANDALL WRAY,  Should Corporate Tax Hikes Be Included in Biden’s “Build Back Better” Plans?

"As Modern Money Theory claims, corporate taxes are not really used to finance federal government spending, and if their impact on reducing wealth inequality or inflation pressures is marginal, at best, why have them? We follow Hyman Minsky’s recommendation that taxes on corporations ought to be eliminated entirely."

Twitter Jul 12

Twitter Jul 13

Twitter Jul 21

 

Bill Mitchell's blog Jul 30, 2021

"But MMT is not a ‘movement’, nor, is it a progressive agenda.

I keep reading things like “MMT advocates taxing the rich”.

It doesn’t.

What an understanding of MMT will allow one to conclude is that there is no contingency between the provision of public services or infrastructure by government and tax revenue it might receive from high income or wealth individuals."

"When I talk about the need to ‘tax the rich’, I am expressing a value system, which is quite separate from when I am teaching the principles of MMT."

Twitter Sep 6, 2021

Twitter Sep 11, 2021

Twitter Oct 22, 2021

Twitter/X Jun 9, 2024

MMT: Academic snake oil for the people

Comment on Bill Mitchell on ‘The ‘tax the rich’ call bestows unwarranted importance on them’

Blog-Reference and Blog-Reference

MMT is a selection of trite slogans that have NO scientific support of any sort.

MMT’s key message for the people is: “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.” (Mitchell)

True, the government can replace taxation and in addition increase spending at any time for any purpose by deficit-spending/money-creation. This has two effects:

• The household sector = ninety-nine-percenters is taxed in real terms by an almost imperceptible price hike (NOT inflation). Open taxation turns into stealth taxation, and in real terms, NOTHING changes.
• Because Public Deficit = Private Profit, the one-percenters enjoy an immediate profit boost. In addition, part or all of the increased public debt can become a long-term source of interest income depending on whether and how the public debt is consolidated.

The replacement of taxation by deficit spending clearly benefits the one-percenters. The benefit is proportionally greater if the income tax is progressive. To replace progressive taxation with deficit spending is the non-plus-ultra of inverse redistribution.

So, from the standpoint of simple self-interest, the one-percenters and their useful academic/journalistic spokespersons should consistently argue FOR deficit spending, and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. This, of course, does not happen in the political realm.

MMTers as champions of deficit spending for the people are in effect agenda pushers for the one-percenters, no matter what they are saying or what they are thinking of themselves.

Bill Mitchell, for example, argues elsewhere: “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”#1

Bill Mitchell’s mistake/error/fraud lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business, and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. That is too bad because the macroeconomic Profit Law says Public Deficit = Private Profit which means that Bill Mitchell and his academic colleagues ― wittingly or unwittingly does not matter ― argue on behalf of the one-percenters.#2

Whether MMTers are in a state of self-delusion or know full well what they are doing is anybody’s guess. Objectively, all of MMT is provably false proto-scientific garbage.#3

Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: “Do we need the rich’s money?” "No".

No, because “we”, the ninety-nine percenters, pay for the social goodies that MMTers promise “us” through stealth taxation and transfer the newly printed money, which we do not need, via deficit spending and increased profits directly into “their” tax havens.

No, “we” do not need the rich’s money. The rich need it and Bill Mitchell and the MMTers are pushing their agenda in academia, in the econblogosphere, and in social media.#4

Egmont Kakarot-Handtke


#1 billy blog “Oh poor Britain …”
#2 Down with idiocy!
#3 For the full-spectrum refutation of MMT see cross-references MMT
#4 Are MMTers stupid or corrupt or both?

Related 'Deficits matter for distribution' 'MMT, money creation, stealth taxation, and redistribution' and 'Full employment through the price mechanism' and 'MMT: miscommunication, mistakes, misdirection' and 'Forget Keynes' and 'MMTers are NOT Friends-of-the-People' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder'.

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Twitter Feb 2 (Don't) Tax the rich

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 “The time for pussy-footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.” (Richard Murphy)

MMT’s true program

Comment on Bill Mitchell/Thomas Fazi on ‘Seize the Means of Production of Currency ― Part 2’

Blog-Reference and Blog-Reference

Bill Mitchell and Thomas Fazi tell the representatives of the Labour Party and the general public: “There is no MMT program! The ‘Labour’s own economic programme’ will be implemented, if they gain office, in the context of a monetary system that is best understood through the MMT lens and the principles outlined in ― Seize the Means of Production of Currency ― Part 1.”#1

The Labour Party’s representatives, though, are too stupid to live: “Trying to set up a comparison to show ‘Labour’s own economic programme’ is superior or more sensible demonstrates Meadway’s complete lack of understanding of what MMT is. It is such a basic error that he should disqualify himself from further discussion until he takes the time to understand this key difference between a ‘lens’ that allows for understanding and a policy program.”

And this is MMT’s true program in a nutshell: Serve the Oligarchy/Undermine the Labour Party.

Modern Monetary Theory ― or the lens as MMTers like to call it ― is refuted on all counts.#2 The macroeconomic Profit Law entails Public Deficit = Private Profit, which means that the central MMT policy recommendation of deficit-spending/money-creation benefits the Oligarchy and certainly not the membership of the Labour Party. In other words, MMTers attempt “… to get citizens and workers to accept ― demand even ― policies that are not in their class interest.”

Accordingly, MMTers vehemently attack the two traditional economic planks of Labour: budget-balancing over the business cycle and taxing the rich.

Budget-balancing in any shape or form is anathema for MMT.

With regard to taxes, which are, according to MMT, not needed at all for funding government programs but only in the improbable case of inflation, Bill Mitchell and Thomas Fazi rhetorically ask: “Does this mean that we shouldn’t ‘tax the rich’? The present authors’ values indicate we are all for taxing the rich. But not to get their money. Rather, the rich should pay higher taxes in order to deprive them of their purchasing power, which translates into economic and political power. This is not a minor issue. Ultimately, fuelling the notion that we need the rich folk’s money to ‘[pay for] our schools and our caring services’, as the likes of Jeremy Corbyn and John McDonnell never tire of repeating, is a dangerous and misguided narrative for progressives to engage in. Not only because it fuel damaging myths about how the monetary system works, but also because it also elevates the rich and high-income earners to an indispensable status that is unwarranted.

As Pavlina Tcherneva, from the Levy Economics Institute, notes in her excellent response to Doug Henwood’s rather loopy attack on MMT…: I would say that Henwood (like other “tax-the-rich-to-pay-for-progress” lefties) is tethered to the wealthy by an imaginary umbilical cord that holds his progressive agenda hostage to his oppressors. To me, this is the definition of self-induced paralysis. Time to cut the cord. MMT has a profound emancipatory power and the Left would do well to awaken to its potential. Progressives should come to terms with the fact that the incomes and taxes paid by the rich do not enhance the capacity of a currency-issuing government to provide first-class public services and infrastructure.”

Deficit-spending/money-creation and not taxing the rich are clearly in the interest of the Oligarchy. The policy guidance of MMT, whose proponents call themselves Progressives, is definitely NOT in the class interest of Labour members and voters.

If the general public finds all this perplexing, however, they should not blame MMTers: “If the reader finds all this perplexing, it is because for the past forty or so years policymakers and mainstream economists and commentators have peddled a series of false myths about how modern monetary systems work.”

The claim: “There is no MMT program!” is plain fraud. The true program of MMT is to brainwash WeThePeople. If anything, deficit-spending/money-creation and not taxing the rich, and driving a wedge between Labour leadership and membership, are in the class interest of the Oligarchy. Bill Mitchell and Thomas Fazi are neither scientists nor Friends-of-the-People but useful idiots of the Oligarchy.

Egmont Kakarot-Handtke


#1 MMT: A new myth for WeThePeople
#2 For the full-spectrum refutation of MMT, see cross-references MMT

Related 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'No MMT illusions! YOU are going to pay for it' and 'How MMT fools the ninety-nine-percenters' and 'How to pay for the war and to be bamboozled by economists' and 'Just one more day: How deficit-spending postpones the breakdown of Capitalism' and 'For MMT = For the Oligarchy' and 'Links on MMTers push Wall Street’s agenda' and 'The not so funny MMT vs Neoliberalism slapstick' and 'Economics has arrived at the bottom of the proto-scientific shithole' and 'MMT has an offer that Labour cannot refuse' and 'Some nasty MMT surprises behind the time horizon' and 'Prophet Stephanie divines the seizure of the means of production of currency' and 'State capture ― time to switch rhetoric' and 'MMT sucks'.

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AXEC142

Meet the MMT smart-arses

Comment on Kaivey on ‘Richard Murphy ― Steve Keen on MMT’*

Blog-Reference

The applause troll Richard Murphy introduces Steve Keen: “I think it fair to say that at a technical level you are quite right that Steve Keen is a smart arse: he is an incredibly intelligent man. … I don’t know Steve well, but I know well enough to be aware that what happens to the people and planet the matter to him, a great deal.”

The applause troll Kaivey introduces MMT: “MMT is a fantastic system for producing a fairer and wealthier society. Social democracy and capitalism can work together, strengthening both. We end up with far less suffering, a safer society, a well educated workforce producing wealth, less crime ― so less money spent on crime prevention ― more people in work, so the tax burden is spread more widely, less ill health ― because people are happier and less stressed ― and excellent infrastructure, etc. The job guarantee can get help people back into work, which won’t be a grind but an enjoyable social, work experience, and a way of meeting new people instead of being stuck at home with nothing to do. And the old and people with disabilities can get the help they require, and need never be lonely either. The countryside can be managed better, with any litter being cleaned up. …”

These, of course, are merely talking points for the MMT sales team. MMT claims to be a superior economic theory and therefore has to be seen against the background of present-day economics. The four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal concept of the subject matter ― profit ― wrong.#1 Economics is a failed science, and MMT, as a relatively young approach, fits in this pattern. MMT is NOT a scientifically valid theory, but a political agenda pushing for the Oligarchy in a scientific/social bluff package. #2, #3, #4

Accordingly, MMTers and their supporters cannot be taken seriously. These folks are not so much smart-arses but either stupid or corrupt or both. For details about this motley crew of proto-scientific con artists, see Stephanie Kelton, #5, #6 Richard Murphy, #7 Warren Mosler, #8 Ellis Winningham, #9 Bill Mitchell, #10 Lars Syll/Dirk Ehnts, #11 Clint Ballinger, #12 Brian Romanchuk, #13 Steve Keen, #14.

Needless to emphasize that scientific standards do not exist for economists in general and MMTers, in particular. #15, #16, #17

Egmont Kakarot-Handtke


* Tax Research UK
#1 To this day, economists have produced NOT ONE textbook that satisfies scientific standards
#2 MMT is better than mainstream economics but still not good enough
#3 Refuting MMT’s Macroeconomics Textbook
#4 For the full-spectrum refutation of MMT, see cross-references MMT
#5 The Kelton-Fraud
#6 Stephanie Kelton’s legendary Plain-Sight-Ink-Trick
#7 Richard Murphy: the MMT fraudster dressed up as realist
#8 MMT: The one deadly error/fraud of Warren Mosler
#9 A clueless MMTer explains macroeconomics to clueless beginners
#10 Bill Mitchell, MMT’s fake scientist
#11 The public-debt and private-profit pushers
#12 What and where is profit?
#13 Economics: How to stop mental pollution and global dumbing
#14 Where advanced Heterodoxy — represented by Steve Keen — took the wrong turn
#15 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
#16 Economics: The proto-scientific mob embroiled in just another gang war
#17 Economics: 200+ years of scientific incompetence and fraud

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REPLY to Kaivey on Mar 23

You say: “Let’s assume all Businesses make 5% profit.”

That is your problem: you have no macroeconomic theory, to begin with, and therefore you have no idea how a 5% profit comes about.

The first question of economics is this: “How can they [the capitalists] continually draw 600 p. st. out of circulation, when they continually throw only 500 p. st. into it? From nothing comes nothing. The capitalist class as a whole cannot draw out of circulation what was not previously in it.” (Marx)

Marx did not answer the question correctly, and neither did Walrasians, Keynesians, Austrians, and MMTers.#1 What all these fake scientists lack for a proper analysis are the correct macrofoundations.

The correct macrofoundations are given with this axiom set: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

So, if the total wage income of the household sector Yw is 100 in a given period and the household sector spends all on consumption C=Yw, then the macroeconomic profit of the business sector Q≡C−Yw is zero. It does not matter whether there is full employment or unemployment. Profit is zero at any employment level.#2

If the total wage income of the household sector is 100 and the household sector spends C=105 on consumption, then there is a one-off price hike and the profit of the business sector is 5. This is how the business sector makes a 5% profit. Profit comes from deficit-spending/dissaving of the household sector. The macroeconomic Profit Law says Q≡−S for the most elementary case.

This is, in essence, how the monetary economy works. And economists, including MMTers, don’t get it to this day. #3

If the total wage income of the household sector is 100, and the household sector spends all on consumption, and the government sector applies deficit-spending/money-creation of 5, then there is a one-off price hike, and the profit of the business sector is 5.

If the total wage income of the household sector is 100 and the household sector spends all on consumption and if the government sector puts hitherto unemployed to work for cleaning up the environment and pays them 5 and these additional workers fully spend their income on the unchanged output O of consumer goods, then there is a one-off price hike and the profit of the business sector is 5.

Note well that this deficit-spending/money-creation has to be repeated in subsequent periods; otherwise, employment and profit fall back to their initial levels. This has the effect that public debt grows continuously. The mirror image of growing public debt is the growing financial wealth of the Oligarchy. This is what the smart-arse MMT policy of deficit-spending/money-creation amounts to. #4, #5

There is a better way to achieve full employment. #6


#1 The Profit Theory is False Since Adam Smith
#2 Essentials of Constructive Heterodoxy: Employment
#3 Refuting MMT’s Macroeconomics Textbook
#4 Keynes, Lerner, MMT, Trump, Biden, and exploding profit
#5 MMTers make Capitalism work
#6 Full employment through the price mechanism

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REPLY to Kaivey on Mar 23

You say: “Richard Wolff says the capitalists have to mark up prices more than they cost to produce, and so the wages of the wages will never be enough to buy all the products they make, and this leads to unemployment and poverty.”

To recall, the elementary production-consumption economy is, for a star,t defined by three macro axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw), and two definitions (Q≡C−Yw, S≡Yw−C).

Given the two conditions, (i) the market-clearing price is P=W/R (= macroeconomic Law of Supply and Demand), and (ii) monetary profit Q is zero because of C=Yw (= macroeconomic Profit Law).

The Law of Supply and Demand says that the price P is the dependent variable. On the other hand: “Richard Wolff says the capitalists have to mark up prices …”

In this case, the price is NOT the dependent variable but the independent variable. As a consequence, the quantity variable has to adapt. So, the condition of market-clearing X=O has to be skipped. With a markup price P>W/R, the business sector obviously can no longer sell the whole output, i.e. X<O, and the stock of unsold output accumulates. Profit, though, is still zero because of C=Yw.

Markup pricing does NOT produce a higher profit, only a higher inventory. This, of course, is not a stable situation. If the business sector reduces employment, this only slows down the growth of inventory. The economy is in a death spiral.

The methodological point is that economists cannot make up their minds between two incompatible models: (i) market-clearing and price as dependent variable, (ii) markup price-setting and change of inventory as dependent variable. Supply-demand-equilibrium Walrasians and markup Keynesians simply blather past each other in all eternity.

The upshot, however, is that all this has no bearing on profit because profit Q depends alone on deficit spending, i.e., on C>Yw.

MMTers, though, have not realized anything. The proof is in the MMT sectoral balances equation, which reads (I−S)+(G−T)+(X−M)=0. In this equation, the balance of the business sector Q ― the key variable of Capitalism ― is missing. Not so smart, the MMT smart-arses.

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REPLY to Calgacus on Mar 24

You say: “As the Robinson-Kalecki saying goes, Workers spend what they get. Capitalists get what they spend. And the last includes capitalist, rentier spending on taxes. The tax take has to be put back into the economy or there will be unsustainable surpluses and depressions.”

The first point to notice is that the Kalecki profit equation is provably false.#1, #2

Secondly, you do not properly differentiate between wage income Yw, and distributed profit income Yd. Roughly speaking, wage income goes to the ninety-nine-percenters, and distributed profit income goes to the one-percenters.

It is generally agreed since Kalecki that the spending out of wage income is proportionally higher than spending out of distributed profit income. So, let us assume that the taxation of wage income is reduced and the taxation of distributed profit is increased by the same amount such that total taxes remain unchanged.

Because of the different spending propensities, the increase in spending of the ninety-nine-percenters is higher than the reduction of spending of the one-percenters, and the net effect is an increase of overall demand, which has a positive employment effect. So there will NOT be “unsustainable surpluses and depressions”.

The fact that tax-the-rich has, before AOC, not been a prominent element of MMT economic policy guidance #3 is another indicator that MMTers are, contrary to their social rhetoric, agenda pushers for the Oligarchy.

Your attempt to psychologically defuse the tax-the-rich issue is not very convincing: “Sure progressive taxation is good, but what is really important is the job guarantee, the spending on the non-rentiers. That is what the rentiers hate above all, above progressive taxation.”

You are in line with Bill Mitchell: “The ‘tax the rich’ call bestows unwarranted importance on them.” So MMTers, let’s forget taxation and return to our main job, i.e., to crank up deficit-spending/money-creation and thereby profit.

You say: “The rentiers and the MMTers are the only ones who understand what’s going on.” Yes, these smart-arses are well aware that Public Deficit = Private Profit.


#1 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#2 The axiomatically correct macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M) with Q as monetary profit and Yd as distributed profit income.
#3 MMT: Distribution is the drawback NOT Inflation

Bill Mitchell’s pure MMT teachings for British Labour

Comment on Bill Mitchell on ‘Invoking neoliberal framing and language is a failing progressive strategy (British Labour)’*

Blog-Reference and Blog-Reference

Bill Mitchell claims to be a Progressive. In this capacity he fights British Labour: “I have never supported so-called ‘progressive’ parties that choose, for ‘political’ purposes, to lie to the electorates by adopting neoliberal framing and language as a way of minimising any difficulties that might arise, initially, from the dissonance that accompanies exposure to the truth, after years of believing in lies.”

At some point, Bill Mitchell tells the world, he has realized that British Labour plays a con game: “Over the years it’s been clear to me that we live in a fictional world when it comes to economic matters. … Which tells you that he [Paul Mason] either doesn’t understand what MMT is about (ignorance) or deliberately deceives his audience (fraud).”

To make the matter short here, it is Bill Mitchell and his MMTers who are the fraudsters.#1, #2

Proper economic analysis shows beyond any doubt that the MMT policy of deficit-spending/money-creation is to the advantage of the Oligarchy and to the disadvantage of WeThePeople. The macroeconomic Profit Law entails Public Deficit = Private Profit and this entails that financial wealth is roughly equal to the public debt. In the fictional world of economics, the fictional Progressives are the real agenda pushers/useful idiots of the Oligarchy.

This should be pretty obvious, Bill Mitchell argues vehemently against budget-balancing and taxing the rich and tells Labour that they are stuck in neoliberal thinking.

• “This is the classic ‘soft’ mainstream macroeconomics that assumes the government is financially constrained and is thus not dissimilar to a household. It is ‘soft’ because, unlike the hard mainstream positions, it allows for deficits (‘funded’ by debt) to occur in a non-government downturn but proposes them to be offset by surpluses in an upturn, irrespective of the overall saving position of the non-government sector.”#3
• “The incomes of the rich are therefore essential to provide the capacity for the government to fund the provision of services to health care and welfare.”
• None of this framing or language is what I would call ‘progressive’.

According to MMT, budget-balancing is unexcusable but taxing the rich is of the devil: “It is false to claim that it is virtuous to ‘tax the rich’ in order to fund essential health and welfare services. This is one of the worst frames that the progressives now deploy.”

Obviously, the whole MMT thing is a shell game with the word progressive.#4

Political take-away for British Labour: MMT is bad science, MMT is bad policy, MMTers are bad people. Bill Mitchell’s MMT teachings for British Labour are a gaslighting exercise.

Egmont Kakarot-Handtke


* Billy Blog
#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 MMT Progressives: The knife in the back of WeThePeople
#3 Exploding the Household Fallacy
#4 Mr. Wray goes to Washington

Related 'The sectoral balances obfuscation: stupidity or corruption?' and 'A beginner’s guide to MMT' and 'How Bill Mitchell stalks Jeremy Corbyn'.

MMT: The fusion of Wall Street and Academia

Comment on Bill Mitchell on ‘When two original MMT developers get together to discuss their work’

Blog-Reference and Blog-Reference

Bill Mitchell summarizes: “Last week, Warren Mosler and I had one of our regular catchups and we discussed at length the state of play in Modern Monetary Theory (MMT). We are quite protective of it. We mused about how we started out on this Project and where it has gone. As old stagers do when they get together. We also reflected and compared notes on what the state of MMT is now, given the increasing visibility of the ideas in the mainstream media all around the world and the proliferation of social media activists who have chosen to identify and promote our ideas. There were aspects of that development that we identified as being of concern for us and other aspects which we considered to be a cause for optimism (celebration is too strong a word).”

In other words, the two MMT chief propagandists congratulated themselves and laid down the 2019 communication strategy for the foot soldiers, a.k.a social media activists, “who have chosen to identify and promote our ideas”. Unfortunately, these activists a.k.a trolls/operatives/shills/salespeople, impair the reputation of MMT because they “use the term MMT as a slogan rather than relating to it as a coherent and body of academic work in economic theory and practice that has been meticulously developed over more than 25 years.”

In order to restore reputation and credibility and to raise the low standards of social media communication, #1 and #2, Bill Mitchell took it upon himself to lay down the joint list of essential talking points of MMT propaganda.

What appears to be a bit strange at first glance is that Bill Mitchell and Warren Mosler do not address once the lethal critique of MMT, that is, that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. The word profit does not appear at all in the whole article. As the old quip says, Economics without profit is like Hamlet without the Prince of Denmark.

So, Bill Mitchell’s (Academia) and Warren Mosler’s (Wall Street) joint propaganda directive talks about everything between heaven and earth except MMT’s real political agenda, that is, money-making for the Oligarchy. #3 Obviously, it is intended as a user manual for disinformation and political fraud.

Accordingly, the basic principles of MMT, as laid down by the Oligarchy’s spokespersons, do not deal with how the monetary economy works but with how the state works.

Basic Principle 1: “The state, from inception, as the sole supplier of the funds needed to pay taxes or buy the debt issued by the state, must necessarily impose tax liabilities on the non-government sector before it can spend.”

This is NOT correct. A monetary economy with zero taxes is a real possibility. #4, #5, #6 So, the whole MMT “money story” breaks down already in the first sentence.

There is no need to waste time with the rest of the story. #7

MMT is simply poor science. “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum) MMTers do NOT have the true theory.

This is the fact of the matter. The axiomatically correct macroeconomic Profit Law reads Q_m≡Y_d+(I−S_m)+(G−T)+(X−M). With regard to the government’s budget, it boils down to Public Deficit = Private Profit, i.e., (G−T)≡Q_m. This piece of pure economic analysis translates into the scientific insight that MMT’s foundational sectoral balances equation is false, and into the political insight that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. In other words, “progressive” MMT policy is a political fraud. #8

The fraud is exactly located in this assertion: “In accounting terms, the government’s deficit (surplus) is exactly equal at all times to the non-government sector’s surplus (deficit).” #9

MMT is a refuted economic theory, and its proponents are either stupid or corrupt or both. Bill Mitchell’s and Warren Mosler’s joint propaganda directive is the incontrovertible proof.

The general public, a.k.a. WeThePeople is accustomed to the idea that the state is in the hands of the Oligarchy but upholds the idea of the independence, objectivity, and impartiality of science. Economics has never been a science, but what Feynman called a cargo cult science. It is NOT a coincidence that both Adam Smith’s Wealth of Nations and the United States Declaration of Independence were published in 1776. Together, they constitute the birth certificate of the US Oligarchy.

MMT stands firmly in this tradition. Its scientific content is zero, and its scientific ethics is zero. #10

Egmont Kakarot-Handtke


#1 You are fighting for life? On all fronts? MMT can save you! Or maybe not?
#2 The Kelton-Fraud
#3 MMT: A free lunch for the Oligarchy
#4 The Third Way: Towards the Happy Zero-Tax economy
#5 The ultimate ― analytical ― origin of money
#6 Nick Rowe’s soapbubbling about money
#7 For the full-spectrum refutation of MMT see cross-references MMT
#8 Economics: A pointless left-right wrestling show
#9 MMT and the magical profit disappearance
#10 MMT: Time to say goodbye

Related 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'Deficit-spending/money-creation is ALWAYS a bad deal for WeThePeople' and 'MMT and the promotion of Wall Street's idea of social policy' and 'MMT: The one deadly error/fraud of Warren Mosler' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder'. For details of the big picture, see cross-references Scientific Incompetence.

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REPLY to Joe on Dec 14

You say: “Imo, Principle 3 should be principle 1, as the sectoral balances is the most important economic principle, by far. It’s the basis of every single economic transaction, monetary or barter, ever done. I gained what you lost and you gained what I lost. We may decide we’re both better off but nevertheless, the zero-sum nature of it remains. This principle alone rules out much of mainstream economic thought, especially in the European continental context. Everyone can’t be in surplus simultaneously.”

Mathematically true: Everyone can’t be in surplus simultaneously.

MMTers, though, got the math wrong. The blunder is exactly located in this assertion: “In accounting terms, the government’s deficit (surplus) is exactly equal at all times to the non-government sector’s surplus (deficit).”

The axiomatically correct 3-sector relation reads (G−T)≡Q_m+S_m, #1 i.e., the government’s deficit (surplus) is exactly equal at all times to the SUM of the business sector’s surplus (deficit) and the household sector’s surplus (deficit).

The business sector’s surplus Q_m is called profit, and the household sector’s surplus S_m is called saving. The business sector’s deficit is called loss, and the household sector’s deficit is called dissaving. All combinations of the business sector’s profit/loss and the household sector’s saving/dissaving that are equal to (G−T) are possible.

The blunder of Principle 3 invalidates the WHOLE of MMT. The two storytellers, Bill Mitchell and Warren Mosler, are too stupid for the elementary mathematics that underlies macroeconomic accounting. #2 Needless to emphasize that the “social media activists who have chosen to identify and promote” their ideas understand even less. They are brain-dead agenda pushers, as the posts of S400 and Clint Ballinger clearly demonstrate.


#1 Causally speaking, it reads Q_m⇐(G−T)−S_m, but this is not the point at the moment. The point is that one has 3 sectors (government, business, household) and NOT 2 (government, “non-government”). The inadmissible collapsing of the business sector and household sector to the “non-government” sector makes profit disappear. This operation, the Humpty Dumpty Fallacy, is absolutely disqualifying for an academic economist.
#2 Wikipedia and the promotion of economists’ idiotism

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REPLY to Kaivey on Dec 14

You say: “Egmont says they when the government deficit spends it creates inflation …”

No, I prove the exact opposite: deficit spending per se does NOT cause inflation. #1


#1 MMT and the inflation-red-herring

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REPLY to Kaivey on Dec 15

You say: “… when the government deficit spends … the rich capture the money, but they capture most of people’s money in the end anyway. If people borrow from the banks, they capture this money as well when they buy goods and services. ”

The answer is in the mathematical truth: Everyone can’t be in surplus simultaneously.

So, if the balance of the government sector (G−T) is zero, and the balance of the household sector Sm is zero, the business sector as a whole cannot make any profit, i.e., Qm=0. This follows from the macroeconomic Profit Law Qm≡(G−T)−Sm.

So, “the rich” can capture NOTHING, i.e., cannot be in surplus, if the other sectors together are not in deficit. Profit for the economy as a whole does NOT depend on greediness or grabbiness or profit maximization or other psychological/behavioral factors, but solely on the macroeconomic balances.

While it is true that one firm can increase profit by increasing productivity or lowering wages, this does NOT hold for the economy as a whole. This is the Fallacy of Composition.

“WeThePeople” can effortlessly prevent “the rich” from “capturing” profit by setting the sectoral balances right. #1 With deficit-spending/money-creation, though, MMTers do the exact OPPOSITE.


#1 How the 99 percent can bring overall profit of the 1 percent legally down to zero in 2017